Coinbase Under Fire for Blocking VPN Users, Sparking Privacy Concerns

Users criticize crypto exchange's decision to block VPN access, calling it an ineffective security measure

  • Coinbase restricts accounts accessing platform through VPNs
  • EthHub co-founder’s $25,000 USDC transfer blocked due to VPN usage
  • Product designer confirms VPN use triggers negative risk assessment
  • Users criticize policy as privacy rights violation
  • Annual anti-money laundering compliance costs estimated at $213 billion

Cryptocurrency exchange Coinbase faces user backlash after implementing restrictions on accounts accessing the platform through Virtual Private Networks (VPNs), highlighting tensions between security measures and user privacy in digital asset trading.

- Advertisement -

VPN Restrictions Spark Controversy

The issue gained attention when EthHub co-founder Eric Conner reported his account was frozen while attempting to transfer $25,000 in USDC. Coinbase product designer Scott Shapiro confirmed that VPN use triggers negative risk assessment markers, stating, "Attackers always use VPNs, so our risk models take that as a negative sign even if you’re legitimately using your own account."

Industry Response

Security experts and industry figures criticized the policy:

  • Kraken‘s chief security officer warned about forcing users to choose between financial freedom and physical safety
  • Multiple users highlighted privacy concerns and threatened to stop using the platform
  • Some defenders, including Blockworks co-founder Jason Yanowitz, supported Coinbase’s security-first approach

Regulatory Context

The controversy emerges amid broader discussions about financial access. Coinbase CEO Brian Armstrong recently criticized anti-money laundering regulations, citing their $213 billion annual compliance cost and negative impact on consumers.

Resolution and Impact

While Conner eventually regained account access, he emphasized that his public profile helped resolve the situation, suggesting others might face more challenging resolution processes. The incident raises questions about balancing security measures with user privacy rights in cryptocurrency trading platforms.

✅ Follow BITNEWSBOT on Facebook, LinkedIn, X.com, and Google News for instant updates.

Previous Articles:

- Advertisement -

Latest

American Engineer Drugged, Robbed in Sophisticated London Crypto Heist

An American software engineer lost approximately $123,000 in cryptocurrency after being drugged and robbed in London.The victim was targeted by an impersonator posing as...

Max Keiser Doubts New Bitcoin Treasuries’ Discipline in Bear Market

Bitcoin-focused companies are increasingly copying the treasury strategy used by Michael Saylor's Strategy.Max Keiser raised doubts about whether these newer companies can maintain commitment...

South Korea Election Puts Crypto Policy at Center of Debate

Nearly one-third of South Koreans hold digital assets, making crypto a vital issue in the upcoming presidential election.Both major parties support crypto exchange-traded funds...

Scottsdale Residents Lose $6M to Crypto Scams; Police Respond

Scottsdale residents have reported losing over $6 million to cryptocurrency Scams in 2024.Authorities say actual losses could be higher, as not all cases are...

Ethereum Bullish Patterns Signal Altseason, 55% Rally Possible

Ethereum is showing two bullish chart patterns against Bitcoin, indicating a possible 30–55% price increase. Crypto analysts say an ETH/BTC rally could spark a broad...

Must Read

7 Best Audiobooks on Cybersecurity

Cybersecurity has become an essential topic in our increasingly digital world. As technology evolves and becomes more integrated into our daily lives, the importance...